The majority of MPs voted in favour of extending VAT to static holiday caravans.

MPs voted to reject the following new clause, which would have been inserted into the Finance Bill[1]:

No new Order shall be made under section 30(4) or 31(2) of the Value Added Tax Act 1994 which amends the Act to apply to holiday caravans that are currently zero rated.’.

This clause was an attempt to prevent one of measures announced as part of the budget coming into effect. The 2012 Budget document[2] included a statement saying:

VAT will be extended to close loopholes, including by applying it to...

static holiday caravans (to bring in line with mobile caravans)

The Government's consultation prior to the budget gave further details[3]:

This measure taxes the sale of holiday caravans (mainly static holiday caravans), ensuring that the sale of all holiday caravans is standard-rated, while preserving the zero rate for residential caravans.

...

Currently, the sale of a caravan that can legally be towed on UK roads by a typical family car is standard-rated (caravans 7m or less in length and less than 2.55m wide). The sale of larger caravans is zero-rated, even though many are used for holiday purposes.

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